Wednesday, September 26, 2012

New in-cell touch panel technology seen at the heart of the iPhone 5's supply issues

On Monday, Apple said it had shipped 5 million iPhone 5 units in the device's first weekend on retail shelves. That wasn't good enough, though, for Wall Street, as analysts expected more, and the stock took a tumble from an all-time high last Friday.

Apple's decision to switch to in-cell touch panels, which we discussed in detail earlier, is seen as a key driving force behind the iPhone 5 supply issues.

In-cell touch panels eliminate the need for an external module or film, which reduces the weight of the iPhone 5 as well as slimming down the panel array. In-cell touch panels can be made thinner than traditional on-cell panels, because the touch sensors are actually placed inside the color filters rather than atop them.

[A video showing an iPhone 5 teardown is embedded.]

Speaking on Monday, Brian White, an analyst at Topeka Capital Markets, said:

“The number is lower than what people had expected. This seems to be driven more by availability than demand.”

White had earlier estimated opening weekend sales of between 6 million to 6.5 million units, excluding Internet purchases that haven’t been shipped.

Apple is the first to ship devices using this new technology. The company haed three OEMs lined up to produce the new panels, but of those, Sharp has had difficulty coming up to speed. The other manufacturers are LG and Japan Display.

Of course, Apple has a history of having short supply of its new iDevices whenever they release one. Sales of the iPhone 5 easily topped initial sales of the iPhone 4S, which reached 4 million in 2011.

Analysts estimated higher numbers, though, as pent-up demand for an LTE version was expected to drive consumers to upgrade to the iPhone 5.

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